There was no change to the goods and services tax (GST) rate proposed in the budget for 2017. The government, instead, will be relying on the collection of GST to cope with expenses and to reduce the dependence on revenue from the oil and gas industry. Thus, there will be no reduction in GST in the short-term.
Given the contribution from small and medium enterprises (SMEs) to the country’s economic growth has become more significant, the government will reduce to 18% (down from 19%) the income tax rate for SMEs on chargeable income (up to the first RM500,000) effective for year 2017. In addition, there is also a new regime for companies—specifically for the years of assessment 2017 and 2018—that offers a reduction in the income tax rate to be applied to the increase in chargeable income, compared to the previous year of assessment. The expectation is that this new system would reduce the cost of business and motivate businesses to increase their chargeable income.
Read an October 2016 report (Chinese and English) prepared by the KPMG member firm in Malaysia
Read more about the 2017 budget in TaxNewsFlash-Asia Pacific.
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